The crackdown could also see the creation of a new offence to target public officials who have a "significant and inexplicable" increase in their assets, and powers to designate companies as being "of money laundering concern".

They are among the proposed measures in what is billed as the most significant shake-up of the money laundering regime in more than a decade as ministers attempt to make the UK a more hostile place for those seeking to move, hide or use the proceeds of crime or corruption.

The potential new powers will be set out in a consultation to be launched by Home Secretary Theresa May on Thursday.

She said: "Britain's world leading financial system is at risk of being undermined by money laundering, illicit finance and the funding of terrorism.

"The laundering of proceeds of crime through UK institutions is not only a financial crime, it fuels political instability around the world, supports terrorists and extremism and poses a direct and immediate threat to our domestic security and our overseas interests.

"This action plan sends a clear message that we will not tolerate this type of activity in our financial institutions."

Among the steps being considered is the introduction of Unexplained Wealth Orders, which would require those suspected of money laundering to declare their wealth.

There would be a linked forfeiture power for cases where the answers provided are unsatisfactory, or where the individual in question fails to respond. These would both be civil measures.

Meanwhile, an "illicit enrichment" offence could be used when a public official has a significant and inexplicable increase in assets.

Under the reforms a new administrative power to designate an entity as being "of money laundering concern" is also being considered. This would require those in the "regulated" sector - such as banks, legal and accountancy firms - to take "special measures" when dealing with them.

Other proposed measures include reforming the suspicious activity reports regime, under which suspicions of money laundering are reported.

Billions of pounds of international criminal money is estimated to be laundered through the the country every year.

In October an official national risk assessment said that taken as a whole, money laundering " represents a significant threat to the UK's national security".

It said there are "significant intelligence gaps" in particular in relation to "high-end" money laundering and also warned that terrorists were suspected to have used bogus identities to open bank accounts.

Transparency International previously concluded it is "too easy" to launder illegal wealth through Britain and that the regime for seizing corrupt assets is "not fit for purpose".

Responding to the new proposals, the organisation's executive director Robert Barrington said: "There are some excellent ideas here, but the proof of the pudding will be in whether they are put into action.

"The powers that are envisaged could make a real difference and, while it is important they are properly debated in parliament to allay any concerns over civil liberties, it is equally important that they are not watered down by self-interested lobbying during the consultation process."

He added: "We are particularly supportive of unexplained wealth orders, an illicit enrichment offence and reform of the AML supervisory regime.

"While the mood music is positive, giving the law enforcement agencies sufficient resources will be a fundamental part of making this work."

Next month Prime Minister David Cameron will host a landmark international anti-corruption summit in London.